The Confederation of Passenger Transport has warned the Government against allowing councils to ‘re-appropriate, for nothing, intellectual property and trading goodwill that they recently sold for substantial sums of money’.
In its response to the Draft Local Transport Bill, it warns that empowering authorities to close businesses, without compensation, ‘is fundamentally unfair, and raises important human rights issues’.
Bus operators are demanding compensation for existing operators forced out of cities and towns to cover redundancy payments, losses incurred in disposing of premises and vehicles, loss of goodwill, and even loss of future revenue and profits.
‘In short, we believe the Government has understated the potential costs of a quality contract scheme, while giving little detail on the potential benefits,’ claimed CPT. Operators were also not convinced their employees would have effective protection, despite ministers assuring they would be able to transfer to the companies winning contracts under the provisions of TUPE. But the Passenger Transport Executive Group said the attempt to block establishment of quality contracts was ‘laughable’.
Tendering was ‘the standard model of procuring public services’, and firms failing to win bids did not usually get compensation. The PTEG spokesman acknowledged that ‘it will take time to move from a deregulated Wild West to a tendered environment’. The fear is that incumbent operators dominating cities’ bus markets – and owning most vehicles and depots – will quickly pull out if they fail to win the new contracts, leaving passengers adrift.
But the PTEG spokesman denied that potentially-difficult transitional periods would deter contracts. PTEs would be able to build new bus garages if incumbent operators refused to sell existing ones, and the Bill could be amended to prevent the rapid de-registering of services, he said.
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